BAKU, Azerbaijan, July 22
By Leman Zeynalova – Trend:
The future of the global refining industry will vary across regions based on three potential scenarios, Trend reports with reference to McKinsey and Co.
In the Energy transition case global liquids demand peaks in 2029 at 104 million barrels per day (MMB/D), with road transport fuels peaking in 2023. European and US utilization recovers in the short term (~2025) but then declines, requiring ~5 MMB/D of closures by 2035. Asian utilization is suppressed by overcapacity in the short term, but more resilient in the long term due to slower demand decline.
By the 2030s, the global refining value pool declines ~36 percent from 2015– 19 levels, with the 2031–35 global average at $100 billion. Asia and the Middle East are the only regions with growing value pools in the 2030s.
In the Delayed transition scenario global liquids demand continues to grow through 2035, with light product demand peaking in 2029. Hub utilization will remain strong, with 1.3 MMB/D of capacity additions occurring in Asia and the Middle East. Asian utilization is suppressed by overcapacity in the short term, but this is short lived. US and European utilization is more sensitive to additions in Asia as utilization will lower in these more marginal markets, but it rebounds quickly.
By the 2030s, the global refining value pool grows by ~16 percent compared with 2015–19 levels, with the 2031– 35 global average at $181 billion. Increases are driven largely by Asia and the Middle East.
In the Accelerated transition scenario global liquids demand peaks in 2024 at 101 MMB/D, with light product demand never recovering to 2019 levels. All hub markets are affected by declining demand almost immediately, particularly Europe and the United States, requiring ~16 MMB/D of unannounced closures by 2035. As in the reference case, Asian utilization is suppressed by overcapacity in the short term but less volatile in the long term due to slower demand decline.
By the 2030s, the global refining value pool declines across all regions, falling to 74 percent compared with 2015–19 levels, with the 2031–35 global average at $40 billion.
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